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Sina Prepares to Take Weibo Public Despite Government Crackdown
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Weibo, the Chinese social-media platform often compared to Twitter, may go public in the United States in the second quarter. The move comes as the Chinese government cracks down on the expression of politically sensitive messages online.
Chinese Internet company Sina Corp. (NASDAQ: SINA) reportedly is planning to raise around $500 million in a U.S. initial public offering. Credit Suisse and Goldman Sachs have been hired to handle the U.S. listing, according to sources familiar with the matter.
Back in April, Alibaba struck a deal with Sina to take an 18% stake in Weibo for $586 million. And last month, Barclays valued Weibo at $4.1 billion.
However, recent increasing competition among social-media platforms has raised concerns about falling engagement of users. A government research group said in January that the total number of microblog users in China fell 9% year-over-year to 280.8 million in 2013. However, Sina said that its third-quarter daily active users grew 11.2% to 60.2 million from the previous quarter. That makes Sina Weibo the country’s largest microblogging outlet. One of its main rivals is Tencent’s WeChat messaging application.
Another reason engagement has fallen is that China has signaled that it considers online dissent as a threat to the authority of governing Communist Party. In September, spreading false rumors online became a jailable offense, and some microbloggers have been arrested since.
Sina shares were up almost 6% in premarket trading Monday, to $77.28 in a 52-week range of $45.54 to $92.83.
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